Corporate Presentation. March 2016

Transcription

1 Corporate Presentation March 2016

2 ABOUT TORO Toro is a light oil focused company in the Alberta / Saskatchewan Viking light oil fairway, owning 140 net sections Since inception in Oct/14, Toro is one of the fastest growing companies in the Viking fairway in the past 18 months via acquisitions, crown land purchases and organic growth Acquired the Hamilton Lake Viking Unit (Nov/14) as the large oil in place, low risk cornerstone asset for growth via horizontal infill drilling/multi stage completions and waterflood reactivation potential Experienced Management Team, Staff and Board of Directors, with proven success in the Viking fairway. Aligned with shareholders Exercising prudence and fiscal discipline in challenging markets Utilization of creative financing structures to accelerate growth PAGE 1

3 TORO OIL & GAS PROFILE STOCK SYMBOL (TSX Venture) BASIC SHARES DILUTIVE SECURITIES FULLY DILUTED SHARES INSIDER OWNERSHIP TOO 56.9 million 15.3 million 72.2 million 21.0% (basic) 32.9% (fully diluted) MARKET CAPITALIZATION (1) NET DEBT (CASH) (2) DILUTIVE PROCEEDS (vested in-themoney) ENTERPRISE VALUE (basic shares) CURRENT PRODUCTION (3) C$20.5 million C$6.2 million C$0.0 million C$26.7 million 950 boepd OIL & LIQUIDS WEIGHTING 70% TAX POOLS C$103.8 million Notes: (1) Based on March 11, 2016 Closing Price. (2) Net debt position as at December 31, 2015 (unaudited) (3) December 2015 Average Production PAGE 2

4 TORO 2015 HIGHLIGHTS Increased corporate production to 1,000 boepd (75% growth) Increased net land position to 140 net sections (51% growth) 4 acquisition and land sales Drilled 14 Hz Viking wells in the second half of 2015; Increased Proven Reserves to 3.9 MMboe ( 100%) and 2P Reserves to 5.5 MMboe ( 120%) 2P FD&A of $16.08 /boe (Amongst best in class in the Viking fairway) Toro 2P NAV (PV10%) = $1.11 /share at Sproule YE15 price deck Toro currently trading at 67% discount ($0.36 /share) at 2P NAV Reduced H2/15 OPEX and G&A by ~30% through internally focused cost reduction initiatives PAGE 3

5 Mboe's Mboe's Mboe's Toro Reserve Growth PDP - Reserve Growth Total Proved - Reserve Growth 2, , , , , , , % 1, % 0% % Change 120% 100% 80% 60% 40% 20% 0% 4, , , , , , , , , % 1, % 0% % Change 140% 120% 100% 80% 60% 40% 20% 0% 6, , , , , , Proved plus Probable - Reserve Growth 5, % 2, % 0% % Change 160% 140% 120% 100% 80% 60% 40% 20% 0% Reserve Replacement Ratio PDP TP 2P 3x 10x 14x NPV10 29% 54% 84% Increase (1) FD&A per boe $24.52 $20.90 $16.08 (1) Excluding impact of production volume royalty PAGE 4

6 CAD$ millions Toro NAV Current share price trades at significant discount NAV per share (basic) equals $1.11 /share Toro closing share price (March 11, 2016) $0.36 /share Toro NAV $80.0 $70.0 $60.0 $50.0 $40.0 $30.0 $20.0 $10.0 $ P NPV10 Reserve Value Undeveloped Land Net Debt Ending Toro NAV 2P NPV10 Reserve Value is based on December 31, 2015 Sproule forecast prices, including production volume royalty Undeveloped land is internally evaluated by Toro taking into consideration land values assessed by others active in the basin Net debt is at December 31, 2015 and is unaudited PAGE 5

7 boe/d production (boe) per million shares Toro Production Growth History Production CAGR (over 5 quarters to Q4 2015) equals 289%. 1, Q Q Q Q Q4 2015(e) Q (e) 0.0 Base Production Sekur Tuck-in 2015 Drill Programs Production (boe) per million shares (RHS) Production, reported Toro has achieved positive production per share growth metrics since inception; Demonstrates ability to manage dilution while expanding the business; Pending acquisition provides opportunity for even greater investment torque PAGE 6

8 VIKING LIGHT OIL FAIRWAY >140 net sections of 100% WI, largely undeveloped land in the Viking light oil fairway High quality, low decline, large oil in place pool with significant near term infill development opportunities Significant further growth opportunities via acquisitions and farm-ins of offset industry competitors Toro Lands Oil Fairway Viking Oil Producers PAGE 7

9 HAMILTON LAKE VIKING UNIT Type log Viking 100% working interest in 48 sections within the Viking Unit Unit OOIP of ~300 MMbbl with only 5% recovered to date Waterflood optimization upside potential Commenced development in Q3/15 with horizontal drilling Drilled 9 hz wells Increased production by 470 boepd by year end Increased P reserves by 2.4 MMbbls B C B & C sands: 4-6m total 18-22% porosity PAGE 8

10 CONSORT AREA Toro lands 42 net sections Moderate risk small e exploration upside 30 bypass pay wells Core samples Oil stained drill cuttings Seismic control Offset in all directions by Viking oil producers Drilled 4 hz wells in H2/15 to de-risk and delineate the acreage Added 11% of 2P value to the 2015 Reserves Report Viking production PAGE 9

11 VIKING TYPE WELL COMPARISON Sproule Type Wells Hamilton Lake Sask Tier 5 Sask Tier 4 IP 90 (boe/d) EUR (Mboe) Hamilton Lake Viking provides superior production and reserves adds relative to Sask Viking - due primarily to superior reservoir quality PAGE 10

12 (bopd) TORO VIKING TYPE WELL 60 Toro Type Well Comparison Type Well Months on Production Booked Locs. Resvs. IP30 boe/d Resvs. kboe Consort Tier 3 (16-22) Consort Tier 4 (14-33) Ham Lake Capital $k Break Even NPV 10% $US/bbl Sproule Flat $70 WTI and $2.50 Flat $60 WTI and $2.50 Flat $50 WTI and $2.50 Flat $40 WTI and $2.50 ROR % Recycle Ratio 10% Tier 3 Type Well $850 $ % % % % BT NPV 10% $k ROR % Tier 4 Type Well $850 $ % % % % % Hamilton Lake $850 $ % % % % % Recycle Ratio 10% BT NPV 10% $k ROR % Recycle Ratio 10% BT NPV 10% $k ROR % Recycle Ratio 10% BT NPV 10% $k ROR % Recycle Ratio 10% BT NPV 10% $k PAGE 11

13 CHARGED FOR FUTURE GROWTH POSITIVE RESULTS TO DATE EXTENSIVE RUNNING ROOM POSITIONED FOR GROWTH Low capital cost operator $850k 1 mile hz $750k ½ mile hz 2P FD&A of $16.08 /boe 2015 drilling added barrels at <$20,000 /boed >140 net sections of land in the Viking fairway >400 low-risk development locations >500 MMbbls OOIP with <5% recovered to date Significant resource base, extensive drilling inventory and excellent balance sheet Focusing on reducing OPEX and G&A to ensure sustainability during challenging times 2016 Guidance to be announced upon visibility of commodity price recovery and relative stability PAGE 12

14 APPENDIX

15 HAMILTON LAKE POOL HISTORY Peak production ~5,000bbl/d Toro 2015 Drilling Program Development Drilling and waterflood expansion First HZ wells added to pool PAGE 14

16 HAMILTON LAKE DRILLING Type log Viking Drilled 10 net wells at Hamilton Lake 8 onstream Production results are in line with expectations and type curves Wells are in various stages of post-frac cleanup with results improving Testing of new technology artificial lift systems to optimize production PAGE 15

17 CONSORT DRILLING Completed second phase of delineation drilling to prove up Toro s Consort lands 4 wells drilled in H2/15. Fully renounces Toro s 2015 CEE obligations Significant hz drilling activity immediately surrounding Toro s Consort lands PAGE 16

18 TORO MANAGEMENT TEAM Barry Olson, President & CEO, Director 30+ years of engineering and senior management experience in the oil & gas industry Founder, President & CEO of Orleans Energy Ltd.: A TSX listed company that grew to 4,700 boepd prior to merging with RMP Energy Ltd. Country Manager, Pacific Oil & Gas Ltd., building the upstream strategy and assets to feedstock a proposed Westcoast LNG facility Don Sabo, P. Geol., Executive Vice President, Director 30+ years of geological and senior management experience in the oil & gas industry Founder, Director, and Executive Vice President, Red River Oil Inc., President & CEO, Director, DS Oil Ltd., Founder, Director, Executive Vice President, Plenty Energy Inc., Founder, Chairman, President & CEO, Gibraltar Energy Inc., Founder, Chairman, Executive Vice President, Genesis Exploration Ltd. Greg Phaneuf, CA, CFA, Vice President Finance & Chief Financial Officer 23+ years of financial, capital markets, M,A&D execution experience Senior Vice President & Chief Financial Officer of Ivanhoe Energy Inc., Founder, Vice President, Finance and Chief Financial Officer of Seven Generations Energy Ltd., Vice President, Corporate Development for The Churchill Corporation, Treasurer, Western Oil Sands Neil Wilson, P.Eng., Vice President Engineering & Chief Operating Officer 20+ years of experience in field operations, reservoir engineering, A&D, and other senior management roles Independent Engineering Consulting, providing engineering support to western Canadian operators, Founder, Vice-President Engineering/Exploitation Manager, Cordero Energy Inc.; Prior to Toro, most recent mandate was with Pacific Oil & Gas Ltd PAGE 17

19 TORO MANAGEMENT TEAM Elizabeth More, P.Geol., Vice President Exploration/Geology 30+ years technical and management experience in the Western Canadian Sedimentary Basin Vice President, Exploration, Angle Energy Inc. Vice President, Exploration, Flagship Energy ;Prior to Toro, most recent mandate was with Pacific Oil & Gas Ltd Kellie D Hondt, Vice President Land & Business Development 10+ years of experience in land negotiations and business development Team Lead of Business Development for Crescent Point US Corp (Denver), Senior Land Negotiator, and Investor Relations Representative, Crescent Point Energy Corp, Various land negotiating roles with Starpoint Energy Trust, Bonavista Energy Trust and CNRL Paul Storey, P.Eng., Vice President Operations 29+ years of operations and management experience including field work in the Beaufort Sea and Russia Management of all aspects of Drilling, Completions and Facilities including recent Alberta Cardium and Viking HZ programs for Equal Energy Kevin McIntosh, Vice President Drilling and Completions 20+ years of drilling and completions experience Manager of Drilling and Completions at Red River Oil Ltd., a Saskatchewan light oil producer; previous roles at companies including Crescent Point Energy, Midway Energy Mr. McIntosh has led the drilling and completions of over 1,000 wells in the WCSB PAGE 18

20 BOARD OF DIRECTORS Chris Seasons Independent Businessman 30 years of oil and gas technical management experience Past President of Devon Canada Corp. Former Chairman of the Canadian Association of Petroleum Producers (CAPP) James Mahoney President and Founder of Horizon One Asset Management Inc. 25+ years experience in the investment management and energy sectors Registered Investment Fund Manager, Portfolio Manager & Exempt Market Dealer in Ontario, Alberta & Quebec Former President of Lehman Brothers Canada Dean Bernhard VP Finance and CFO of RMP Energy Inc. 23+ years of upstream oil and gas experience in Western Canada Founder, VP Finance and CFO of Orleans Energy Ltd. Founder, VP Finance and CFO of E3 Energy Inc. (Sold to StarPoint Energy Ltd. in December 2004) ADVISOR Scott Saxberg President, CEO and Director of Crescent Point Energy Corp. Mr. Saxberg is acting as a special advisor to the management team and board of Toro Oil & Gas BANKER NATIONAL BANK EVALUATION ENGINEERS SPROULE ASSOCIATES LTD. REGISTRAR & TRANSFER AGENT TMX EQUITY TRANSFER SERVICES LEGAL COUNSEL TORYS LLP PAGE 19

21 CONTACT INFORMATION TORO OIL & GAS LTD. 2200, 250 5th Street SW Calgary, AB T2P 0R4 Phone: Fax: Emergency phone: Barry Olson President & CEO, Director Phone: Greg Phaneuf, CA,CFA Vice President Finance & CFO Phone: PAGE 20

22 DISCLAIMER Forward-Looking Statements Certain information contained in this presentation of Toro constitutes forward-looking information or forward-looking statements (collectively, "forward-looking statements") under applicable securities laws. All statements other than statements of historical fact are forward looking statements. Forward looking statements typically contain words such as "anticipate", "believe", confirms, "continuous", "estimate", "expect", "may", "plan", "project", "should", "will", or similar words suggesting future outcomes. More specifically, forwardlooking statements contained herein include statements with respect to: Toro s acquisition of the assets and projects described in this presentation; the private placement financing and the intended use of proceeds; management of Toro s go-forward business strategy; management's assessment of future plans and operations; the potential for increased reserves and greater production and the timing and costs from the proposed assets to be acquired; development and expenditure plans in respect of the proposed projects; and Toro s anticipated capital structure. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond Toro's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, delays resulting from or the inability to obtain required regulatory approvals, inability to retain and delays in retaining drilling rigs and other services, currency fluctuations, imprecision of reserve and resource estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefits of acquisitions and the ability to access sufficient capital from internal and external sources. The foregoing list is not exhaustive. In addition to other factors and assumptions which may be identified in this presentation assumptions have been made regarding, among other things: Toro s ability to complete the proposed acquisitions of the assets described in this presentation; Toro s ability to complete the private placement financing; the general stability of the economic and political environment; the ability to obtain qualified staff, equipment and services in a timely and cost efficient manner; Toro's ability to obtain financing on acceptable terms; the ability to find and expand oil and natural gas reserves through acquisition, development or exploration; future oil and natural gas prices; currency, exchange and interest rates; the regulatory framework regarding royalties, taxes and environmental matters; and the ability to successfully market oil and natural gas products. Readers are cautioned that the foregoing list of factors is not exhaustive. Forward-looking statements contained in this presentation are made as at the date of this presentation and Toro disclaims any intent or obligation to update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws. Market and Industry Data In addition, certain information contained in this presentation is based upon information from press releases, independent industry sources and other publications and websites. None of these sources have provided any form of consultation, advice or counsel regarding any aspect of, or is in any way whatsoever associated with, Toro. Actual outcomes may vary materially from those forecast in such press releases, reports or publications, and the prospect for material variation can be expected to increase as the length of the forecast period increases. While Toro believes this data and information to be reliable, such data and information is subject to variations and cannot be verified with complete certainty. Toro has not independently verified any of the data or information from third party sources referred to in this presentation or ascertained the underlying assumptions relied upon by such sources. NI Advisory In conformity with NI , natural gas volumes have been converted to barrels of oil equivalent ( boe ) using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil. In certain circumstances, natural gas liquid volumes have been converted to a thousand cubic feet equivalent ( mcfe ) on the basis of one barrel of natural gas liquids to six thousand cubic feet of gas. Boes and mcfes may be misleading, particularly if used in isolation. A conversion ratio of one barrel to six thousand cubic feet of natural gas is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion ratio on a 6:1 basis may be misleading as an indication of value. Original Oil in Place (OOIP) is the equivalent to Discovered Petroleum Initially In Place (DPIIP) for the purposes of this presentation. DPIIP is defined as that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production. There is no certainty that it will be commercially viable to produce any portion of the resources. A recovery project cannot be defined for this volume of DPIIP at this time, and as such it cannot be further sub-categorized. PAGE 21